NSIC Credit Rating Scheme

The NSIC credit rating scheme for performance and credit rating seeks to establish independent, trusted third party opinion on capabilities and credit-worthiness of MSEs, and makes credit available at attractive interest rates. It endeavors to enable MSMEs fain recognition in global trade, ensure prompt sanctions of credit from banks and financial institutions, subsidized rating fee structure for MSEs, facilitate vendors/buyers in capability and capacity assessment of MSEs, enable the MSEs to ascertain the strengths and weaknesses of their existing operations and take corrective measures. In this article, we look at the procedure for availing NSIC Credit Rating Scheme.

What is Performance and Credit Rating?

A Performance and Credit Rating is an analysis of performance capability and credit risks associated with a business. Performance and credit rating assignments are completed by approved Rating Agencies which act with independence and without any bias. Some of the factors considered in a performance and credit rating are industry dynamics, financial performance, operational performance, competitive position of the entity, operating efficiency, management capability, organization systems, customer profile, track record with lenders and other stake holders.

Benefits of availing NSIC Credit Rating Scheme

The following are some of the benefits of obtaining a credit rating through NSIC Credit Rating Scheme:

Provides an independent and unbiased opinion on the financial and operational performance of a business.
Easy access to bank funding as it creates credibility amongst bankers.
Confidence building with business partners including investors, suppliers, customers, employees and other stakeholders.
A self improvement tool that can be used as a benchmark and guide to improving business performance.
Visibility on the internet and amongst bankers as the rating would be published by the rating agency.

Approved Credit Rating Agencies

The Reserve Bank of India approves organizations which can provide credit rating services in India. The following Credit Rating Agencies are eligible to provide rating under the NSIC Credit Rating Scheme:

Amount of Assistance under NSIC Credit Rating Scheme

Any SSI or MSME unit having MSME or SSI Registration can avail the NSIC Credit Rating Scheme. The nature of assistance provided from NSIC for Credit Rating is dependent on the sales turnover of the business as follows:

Up to Rs.50 lakh of Sales Turnover: 75% of the fee or Rs.25,000 (whichever is less);
Rs.50 lakhs to 200 lakh of Sales Turnover: 75% of the fee or Rs.30,000 (whichever is less)
More than Rs.200 lakh of Sales Turnover: 75% of the fee or Rs.40,000 (whichever is less)

The NSIC Credit Rating Scheme is offered by National Small Industries Corporation (NSIC). NSIC) is a Government of India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME). NSIC has been working to fulfill its mission of promoting, aiding and fostering the growth of small industries and industry related micro, small and medium enterprises in the country. Over a period of five decades of transition, growth and development, NSIC has proved its strength within the country and abroad by promoting modernization, upgradation of technology, quality consciousness, strengthening linkages with large medium enterprises and enhancing exports - projects and products from small enterprises.

Click here to know more about online SSI registration.

How to avail NSIC Credit Rating Scheme

Any SSI or MSME business wishing to apply for rating will have to fill up the prescribed application form and submit the same to the nearest branch of NSIC or to the rating agency chosen by it, or through empanelled rating agencies such as CARE, CRISIL, India Ratings, ICRA, ONICRA, SMERA, Dun & Bradstreet (D&B), SMERA.

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Frequently Asked Questions

Common questions about NSIC Credit Rating Scheme for MSMEs in India.

The NSIC Credit Rating Scheme is a scheme that seeks to establish an independent and trusted third-party opinion on the capabilities and creditworthiness of Micro, Small and Medium Enterprises (MSMEs). It aims to facilitate access to credit at attractive interest rates and enable MSMEs to gain recognition in global trade.

Some key benefits include easy access to bank funding, building confidence with business partners, using the rating as a self-improvement tool, and gaining visibility among bankers and on the internet. The rating provides an independent and unbiased opinion on the business's financial and operational performance.

The approved Credit Rating Agencies are CARE, CRISIL, India Ratings, ICRA, ONICRA, SMERA, and Dun & Bradstreet (D&B).

The amount of assistance provided by NSIC for the credit rating is based on the sales turnover of the business. For turnover up to Rs. 50 lakh, it's 75% of the fee or Rs. 25,000 (whichever is less); for turnover between Rs. 50 lakh and Rs. 200 lakh, it's 75% of the fee or Rs. 30,000 (whichever is less); and for turnover above Rs. 200 lakh, it's 75% of the fee or Rs. 40,000 (whichever is less).

Any Small Scale Industry (SSI) or MSME unit having MSME or SSI Registration can avail the NSIC Credit Rating Scheme.

The business needs to fill up the prescribed application form and submit it to the nearest branch of NSIC, the chosen rating agency, or through empanelled rating agencies like CARE, CRISIL, India Ratings, ICRA, ONICRA, SMERA, or Dun & Bradstreet (D&B).

Some factors considered are industry dynamics, financial performance, operational performance, competitive position, operating efficiency, management capability, organization systems, customer profile, and track record with lenders and other stakeholders.

A credit rating from an independent and trusted agency can help MSMEs establish credibility and gain recognition among potential global partners, buyers, and investors, facilitating their participation in international trade.

Yes, a credit rating can be used as a self-improvement tool by MSMEs. It provides an objective assessment of the business's strengths and weaknesses, which can guide corrective measures and help improve overall performance.

The NSIC Credit Rating Scheme is offered by the National Small Industries Corporation (NSIC), a Government of India Enterprise under the Ministry of Micro, Small and Medium Enterprises (MSME). NSIC promotes and fosters the growth of small industries and MSMEs in the country.